Netflix To Distribute Original Shows

Netflix announced a price increase if you want to keep unlimited streaming and mail-in DVD options. Photo: REUTERS/Brian Snyder/Files

Taking its cues from rival HBO, Netflix reportedly is in negotiations to secure the rights to exclusively distribute an original series starring actor Kevin Spacey.

The series, directed by David Fincher, is an adaption of a British based miniseries called House of Cards, based off of a Michael Dobbs novel. It would be a huge coup if Netflix was able to secure the rights to the TV series and get their first piece of original content. The deal would mean Netflix would be the first to air the series which is being produced by Media Rights Capital. Media Rights Capital would then get to make arrangements for later broadcast or DVD sales according to a report from The Wall St. Journal.

The deal was first reported by Deadline.com, which said Netflix would pay $100 million for 26 episodes. Netflix has declined to say how much it is spending, and other sources have said the amount is very different.

Original series on cable networks can run up to a few million per episode; the hit series Mad Men had a budget of about $2.3 million for each one, though it had a shorter season than a typical network show. A hit network drama such as ER can reach $10 million, and Friends garnered what was, in 2002, the biggest deal ever for a sitcom when NBC paid about $7 million per episode for the show's final season. Typically the major broadcast networks operate with 22-episode seasons.

Netflix, originally a DVD mailing company, has transitioned over the past year into a subscription based digital streaming video provider. A recent survey from NPD Group said an overwhelming majority of people use Netflix as its digital movie provider. Brining House of Cards aboard would be another way for Netflix to grow its subscription business, which only shows old movies and TV shows.

During the Netflix's last quarterly earnings conference call, chief executive Reed Hastings said the subscription streaming plan been the driving aspect behind the company's strong performance and allowed it to more than double its net subscriber additions estimate. Originally, Netflix estimated it would 3.6 million customers in 2010, when it reality it nearly added eight million.

More than one third of new subscribers are signing up for the pure streaming plan, and we expect that percentage to grow over time, Hastings said.

An official spokesperson for Netflix did not comment on the matter. Media Rights Capital did not respond to an inquiry for comment.